Vodafone Group Plc, the UK’s biggest mobile phone company, saw continuing growth in its interim results in spite of start-up costs of UKP40m related to overseas ventures, up from UKP19m last year. These start-up charges have hit an expected peak in the half and Vodafone hopes the units will begin to contribute in the full year. Overall pre-tax profits rose 6.8% to UKP186.4m on turnover up 43.8% at UKP560.7m. Capital expenditure and investments amounted to UKP179.0m, UKP115.0m for overseas ventures. In the UK, Vodafone Ltd, increased subscriber numbers by 263,000 to 1.4m in the six months. As a whole the UK saw profit up 14% at UKP199m on turnover up 40% at UKP537m. Vodafone’s UK service providers, Vodac Ltd and Vodacom Ltd, formerly VHL Communications Ltd, increased their subscriber bases by 20%. However the profitability of these companies has been adversely affected by abnormal fraud and bad debt, which Vodafone equates to 1% of group turnover, in addition to the 1% normally provided against bad debt. Churn rates rose to 26.5% from 21.5%, but the effect of more careful screening should reduce this to 24% by the end of the year. Vodafone’s business in the rest of the world saw losses at UKP25m, up from UKP6m last time, on turnover up 200% at UKP24m. Of its overseas associates, Panafon SA of Greece, where Vodafone holds 45%, now has 70,000 subscribers to its Groupe Speciale Mobile digital service, doubled in six months. In South Africa, Vodacom Pty Ltd, where Vodafone has 35%, now has 110,000 subscribers. In September, Vodafone acquired 20% of Astec Communications Ltd, which has over 65,000 subscribers. Vodafone also cut its stake in NordicTel Holdings AB to 12.5%, for a profit of UKP4.3m. An interim of 1.64 pence will be paid, up 20%. Gerry Whent, Vodafone’s chief executive, was buoyant about the full year: Our future is rosy, not Orange! he said.
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